BROWARD MAN SENTENCED TO 10 YEARS IN TAX FRAUD SCHEME
Wifredo A. Ferrer, United States Attorney for the Southern District of Florida, John A. DiCicco, Acting Assistant Attorney General of the Tax Division, and Daniel W. Auer, Special Agent in Charge, Internal Revenue Service (IRS), Criminal Investigation Division, announced that defendant Michael D. Beiter, Jr., of Broward County, Florida, was sentenced to 10 years’ incarceration, followed by 5 years of supervised release after having been convicted by a Fort Lauderdale jury of tax and other charges. On August 30, 2010, after a six day trial, the jury found Beiter guilty of corruptly impeding the IRS, sending fictitious financial instruments to creditors, and helping one of his clients evade federal income tax.
According to court documents and testimony during the trial, Beiter marketed a debt elimination and abusive tax scheme. The scheme was premised on the idea that individuals are sovereigns who can declare their independence from ordinary obligations, such as paying creditors and federal income taxes. Beiter promoted the sale of abusive tax packages involving purportedly non-taxable pure trusts. Beiter sold at least 100 of these packages. One of his clients used his tax elimination package to avoid paying more than $900,000 in federal income tax.
According to evidence presented a trial, the defendant filed tax returns with the IRS for tax years 2004, 2005, and 2006 reporting zero income and taxes, despite the fact that he had net taxable income in excess of $1,800,000. Beiter also opened a number of bank and stock trading accounts with bogus taxpayer identification numbers. The evidence at trial also established that Beiter attempted to intimidate IRS employees by contacting them at their homes.
U.S. Attorney Wifredo Ferrer stated, “Tax evasion is a serious crime that impacts all members of society, young and old, rich and poor. The United States Attorney's Office stands committed to prosecuting individuals involved in tax related crimes.”
“We continue to see the negative consequences of participating in abusive trusts schemes,” said Daniel W. Auer, Special Agent in Charge of IRS - Criminal Investigation Division, Miami Field Office. “Today's sentence sends a positive message to honest taxpayers and further exhibits that the IRS and U.S. Attorney s Office are duty bound to protect the integrity of the U.S. tax administration system, and to make sure everyone complies with their tax obligations.”
Mr. Ferrer commended the investigative efforts of the IRS Criminal Investigation Division, U.S. Postal Inspection Service, and the Broward Sheriff’s Office, as well as Assistant U.S. Attorneys Bertha R. Mitrani and John Gonsoulin and Tax Division Trial Attorney Jed Silversmith, who are prosecuting the case.
A copy of this press release may be found on the website of the United States Attorney's Office for the Southern District of Florida at http://www.usdoj.gov/usao/fls. Related court documents and information may be found on the website of the District Court for the Southern District of Florida at http://www.flsd.uscourts.gov or on http://pacer.flsd.uscourts.gov.